SCM 301 Exam 2

Eval of EOQ

Very popular Doesn't handle multiple locations doesn't do well if demand not constant newer techniques take place of EOQ

Reverse logistics

When customer returns goods

types of warehouses

consolidation warehouses- collect ltl shipments for transport in tl quantities private warehouses - owned by firm storing goods public warehouses - owned by for profit orgs and contracted out cold chains - temp controlled warehouses

What is independent demand?

demand for final products

What is DRP? What does the acronym DRP stand for?

describes the time-phased net requirements from warehouses & distribution centers. Links production with distribution planning. Distribution requirement planning.

Warehouse metrics

lbs/units per day, employees per pound moved, orders correctly filled, productivity ratio

What does MRP do?

logic for determining the number of parts, components, and materials needed to product a product. provides scheduling when these parts need to be placed

rail carriers

long distance, heavy or bulky shipments slow and inflexible.

Transportation selection decision

lowest price carrier not lowest cost, takes into account price, time and reliability, accessibility, etc

warehouse location strategies

market positioned strategy - close to customer to maximize distribution product positioned strategy - close to supply source intermediately positioned strategy - midway between supply source and customers

Holding costs defined

risk costs - obsolesce, inventory shrinkage storage space costs - variable storage and handling costs service costs - insurance costs, taxes capital or finance costs - interest charges, opportunity cost

TL operations

semi trucks, 10,000 to 42,000 lbs. cheaper than ltl, goes thru terminal

LTL operations

smaller vehicles, line-haul service to terminal near destination consignee receives, 150 to 10,000 lbs, haul from many shippers. Example fedex, ups, con-way, etc

What is the goal of aggregate planning?

specify option combination of production rate, workforce level, inventory meet demand, use capacity efficiently, maeet inventory policy, minimize cost

Warehouse descriptions

storage of products. distributions of rapid movement

What is MRP? What does the acronym MRP stand for?

system of converting the end items from the master production schedule into a set of time-phased component. Material Requirements Plan

RFID challenges

tagging strategies differ per region, costs are major impediments to fast adoption, different frequencies in different parts of world, UHF signals reflected by metal and absorbed by water

What is ATP?

Available-to-Promise Quantity - difference ebtween confirmed customer orders & the quantity the firm planned to produce

Advantages/disadvantages of ERP

Advantages - reduce supply chain inventories standardize manufacturing processes measure performance standard method disadvantages - substantial time & capital investment complex firms adapt process to meet ERP

Advantages/disadvantages of MRP

Advantages - provides production & planning information information for the entire planning horizon disadvantages - loss of visibility, especially acute for products with a big BOM & ignores capacity & shop floor conditions

Inventory Turnover Ratio

Cost Of Rev/Average inventory. How many times inventory turns in an accoutning period, higher is better

What is ABC inventory control system?

Determines which inventories should be counted Inventory A, account for 20% of total items and 80% of total inventory costs Inventory B, account for 40% of total items & 15% of total inventory cost Inventory C, account for last of 40% and 5% of total inventory cost

What is DRP?

Distribution requirements planning. time-phased finished good inventory replenishment plan is logical extension of MRP Operates in independent demand setting

What is EOQ?

Economic order quantity - determine optimal order quantity, thru order cost and holding cost. =sqrt((2*annual demand*order/setup cost)/ annual holding cost)

What is ERP?

Enterprise resource Planning systems - integrates internal operations of an enterprise with common SW platform

Three categories of operations planning

Long-range aggregate produciton plan (APP) - year or longer, includes construction of facilities & major equipment purchase intermediate - 6 to 18 months. shows quantity & timing of end items short range - few days to few weeks. detailed process for components and parts

Inputs of MRP

MPS inventory records BOM

What is MPS?

Master Production Schedule - detailed disaggregation of the APP, listing the exact end items to be produced by a specific period. Easier to plan under stable demand, planning horizon is shorter than APP

Objective of transportation

Maximize value to firm thru negotiation make sure service is provided effectively satisfy customer requirements

Modes of transportation

Motor carriers (trucks) rail air water pipeline intermodal transportation: coordinated movement involving multiple transportation methods

ROP Eqn

ROP=d (bar) * LT + SS d (bar)=average demand (constant) LT=lead time (constant) SS= safety stock=z*sqrt(sigma(LT)^2*d(bar)^2+sigma(d)^2*LT) z comes from standard deviation, uses alpha

Capacity Planning Components

Resource Requirement Planning (RRP) - a long-range capacity planning module, checks whether aggregate resources are capable of satisfying the aggregate production. Resources considered include gross labor hours & machine hours Medium-range capacity plan, or rough-cut capacity plan (RCCP) - used to check feasibility of MPS. Converts MPS from production needed to capacity required, then compares it to capacity available Capacity requirement planning (CRP) - a short-range capacity planning technique that is used to check the feasibility of the material requirements plan Lead capacity strategy - a proactive approach that adds or subtracts capacity in anticipation of future market conditions and demand Lag capacity strategy - a reactive approach that adjusts its capacity in response to demand Match or tracking capacity strategy - a moderate strategy that adjusts capacity in small amounts in response to demand and changing market conditions

Price break model formula

Run EOQ three times, compare TAIQ three times. Lowest price wins.

What is ROP?

Statistical reorder point. Lowest inventory at which a new orde rmust be placed to avoid stockout. Never certain and require safety stock

public warehouses advantages/disadvantages

advantages - flexibility and investment cost savings disadvantages - lack of control

private warehouse advantages/disadvantages

advantages - reduces purchasing and transportation cost, greater control, better workforce utilization, can generate income disadvantages - financial risk, bind firms to location, insurance companies don't like to insure

Key transportation documents

bill of lading - list of goods shipped. gives carrier liability. not liable for acts of god, public enemy, public authority, shiper, and defects inherent to the goods freight bill - charges for shipping

types of rail cars

boxcar, hopper car, covered hopper, flat car, refrigerated car, gondola, tank car

Functions of inventory

buffer from uncertainty in marketplace decouple dependencies in supply chain (ie safety stock)

3 strategies to meet demand

chase - match production to customer order rate by hiring and laying off employees level - stable workforce with constant output, inventory and backlogs absorb fluctuations mixed - combination of chase and level

water transportation

cheap, slow, inflexible. competes w/ rail & pipeline.

What is MRP II? What does the acronym MRP II stand for?

combined MRP with master production scheduling, rough-cut capacity planning, capacity requirement planning, and other operations planning software modules. Manufacturing resource planning

Inventory Costs

direct costs - directly traceable to unit produced indirect costs - cannot be traced directly to unit produced fixed costs - independent of output quantity variable costs - vary with output level order costs - direct costs for making an order holding/carrying costs - incurred for holding inventory in storage

Three fixed order quantity models

economic order quantity model quantity discount model economic manufacturing quantity model

air carriers

expensive, but fast. light, high value goods over long distance. most subject to weather

types of motor carriers

for-hire carriers - provide services to public, charge fee for service private carriers - provide service to company that owns carriers, doesn't charge fee. still has cost.

motor carrier characteristics

high accessibility faster than rail/water affected by weather/traffic small transportation high cost

What does the MRP require?

independent demand information parent-component relationships from BOM inventory status of final product & components planned order releases (most important output of MRP system)

What is dependent demand?

internal demand for parts based on final product. Ie, subassemblies, components, raw materials

What is ERP? What does the acronym ERP stand for?

is an extension of MRP-II. Enterprise requirements planning

What is logistics necessary for?

move goods from suppliers to buyers move finished goods move work-in-process materials return/recycle goods

Basic warehouse operation

movement - receiving, putting away, shipping, order picking storage - stock lation, warehouse management system

What is cross-docking

practice of unloading an inbound vehicle and reloading product onto an outbound vehicle with little or no storage

What is hierarchical planning?

process that translates annual business plans & demand forecases into a production plan for a product family

3PL warehouse

provide reliable and timely delievery used to transfer items into foreign lcoations used by small businesses provide a variety of transportation services

Total annual inventory cost

r=annual demand c=cost per unit R/Q = orders per year Q=EOC s=ordering cost per order Q/2-avg inventory k*C=annual holding cost per unit

4 Categories of inventories

raw materials - unprocessed purchase inputs work-in-process - partially processed materials finished goods - products ready for shipment Maintenane, repair, and operating (MRO) - materials used in productino (ie machines)

Bid data decision-making

refers to collections of data sets that are too large to be processed by traditional data management tools

What does logistics provide?

time utility - products are delivered at the right time place utility - products are delivered to the desired location

pipeline

used for oil, little maintenance. limited in variety. low accessibility, low variable costs. low price